On August 23rd, during his speech at Jackson Hole, Fed Chairman Powell said:
“Overall, the economy continues to grow at a solid pace. But the inflation and labor market data show an evolving situation. The upside risks to inflation have diminished. And the downside risks to employment have increased. The time has come for policy to adjust.”
With those remarks, Powell signaled that the Fed will begin cutting the Federal Funds Rate at the end of its next FOMC meeting on September 18th.
The only uncertainty is how large the rate cut will be – 25 basis points or 50 basis points.
This week’s Macro Watch On Substack video explains why the Fed has decided that this is the time to begin lowering rates.
To do this the video examines the latest trends in the three components that make up the Core Personal Consumption Expenditure Price Index, as well as recent developments in the US labor market.
WATCH IT NOW!
After you do, share your thoughts on whether the Fed is cutting too soon or too late.
